Service providers have only recently started helping to enable the digital transformations of their enterprise customers, but AI and ML hold the most immediate promise for those transformations.

Research by IHS Markit’s Michael Howard, senior research director of carrier networks, found that artificial intelligence (AI) and machine learning (ML) will likely have the most impact on cloud services offered to customers and carrier network operations and management.

Despite the optimism, it’s early days for AI, ML and blockchain. IHS Markit’s survey of 25 telecom operators found that 68% of them had started to investigate AI and ML for their businesses, while 56% had begun lab testing of those types of solutions. On the other hand, 24% already have between three and five targeted use cases in production deployment.

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Howard said blockchain is even less understood by the telecommunications industry than AI and ML, since most public discussions around it have been in regards to cryptocurrencies.

“Many executives believe that blockchain could be used to maintain data integrity and support peer-to-peer trust in call detail records (CDR), once the technology is ready and its value has been defined,” Howard wrote in his report. “A few hopeful operators are confident that blockchain is a strong candidate to ease overall telecommunications business transactions.”

There has been a fair amount of activity on the blockchain front over the past year. MEF showed its support for blockchain at its MEF18 conference in October. In addition to the blockchain demos at the conference, MEF CTO Pascal Menezes said the standards development organization was using blockchain to exchange money and allocate resources between carriers.

One of the proof-of-concept (PoC) demonstrations at MEF18 was the MEF Lifecycle Service Orchestration (LSO) Sonata API to enable transactions across a blockchain-based marketplace. LSO Sonata includes intercarrier quoting capabilities and blockchain-based billing and settlement features.

BT, Colt, HGC Global, Telefonica and Telstra conducted a trial early last year that used blockchain for wholesale settlement. In August, CBCcom, PCCW Global, Sparkle, Tata Communications, Clear Blockchain Technologies and Cataworx announced a blockchain PoC trial.

In September, AT&T announced it was working with IBM and Microsoft Azure’s blockchain technologies to create a suite of blockchain-based services that are designed to help its enterprise customers cut costs and speed automation processes. In addition to blockchain, AI and ML, IHS Markit’s Howard also identified automation and work with open source groups and standards bodies as key elements of digital transformations for carriers and their enterprise customers.

Automation is a “must have” for service providers as they transition their networks from legacy architectures to hybrid, and, eventually, autonomous networks. While some operators, such as Verizon, are already using closed-loop automation to build out orchestration, others are having difficulties with automating their existing networks and systems, including dealing with legacy OSS/BSS, security, and their own lack of knowledge, vision, and skills about how and what to automate, according to IHS Markit.

Operating support systems and billing support systems have become a tangled web of solutions over the years for most service providers as they have added more OSS/BSS systems from different vendors into their networks. While legacy OSS/BSS is weighing down the move toward virtualization in networks and cloud-based services, service providers need to keep a large chunk of them in place as they migrate to their next-gen networks.

Lastly, Howard said that while open source software communities and standards bodies were important for the telecommunications industry, few of them were ready to enable automation and digital transformations at a meaningful level. Vendors and service providers have been frustrated that some of the open source groups and standards bodies are duplicative, or that they move too slowly.

“Virtually all operators agree that open source software and standards will help the industry quickly and efficiently develop new technologies that underpin the automation that digital transformation depends upon,” Howard said. “They also believe that these standards are not yet ready for prime time. However, they also have confidence that ESTI ISG NFV, IETF, ONAP, ONF, OpenStack Foundation, and MEF will all play important roles in the progress of automation and digital transformation.”